Stock Market Overview
U.S. stock futures fluctuated on Friday as Wall Street assessed the state of the U.S. economy from a record high, gearing up for the Federal Reserve’s much-anticipated interest rate decision next week.
Market Performance
Futures for the Dow Jones Industrial Average (YM=F) fell by 0.2%, while S&P 500 futures (ES=F) decreased by 0.1%. Contracts for the Nasdaq 100 (NQ=F) remained stable. All three major indexes reached record highs on Thursday, with the Dow (^DJI) closing above 46,000 for the first time.
Economic Signals
Investors have been analyzing recent economic data to predict the Fed’s actions. Job data from last week revealed signs of weakening in the labor market, including just over 20,000 new jobs added last month and a spike in initial jobless claims to near four-year highs.
Inflation Concerns
Despite persistent inflation, consumer prices increased last month, reflecting impacts from tariffs imposed by President Trump. Nevertheless, investors believe inflation could be manageable enough for the Fed to proceed with rate cuts.
Traders’ Expectations
Current market pricing suggests there is over a 90% likelihood of a quarter-point cut during the Fed’s upcoming September meeting, with about 75% expecting three cuts total before the year concludes.
Consumer Sentiment Insights
The days leading up to the Fed’s meeting are likely to be quiet. Nonetheless, Friday will see the release of the University of Michigan’s preliminary consumer sentiment for this month. While consumer spending is expected to remain stable, Americans appear to be losing confidence in their purchasing power.
Weekly Market Trends
As it stands, all three major stock indexes are on track for weekly gains of approximately 1.6%. The Dow (^DJI) is poised for its first gain in three weeks after surpassing the 46,000 mark, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) are set for their strongest performances since early August.
